Author, Musician, Researcher, Educator, Exiled Brooklynite

2008.03.05

Lessons from Nine Inch Nails: Configurability and artificial scarcity

Mike Linksvayer just posted an interesting analysis of Nine Inch Nails' new Creative Commons-licensed release, Ghosts I-IV. The basic story is, despite having made the music available freely in MP3 format online, they made at least $750,000 in 2 days (!) -- at least as much as they would have made from a blockbuster major label release, and a hell of a lot quicker (for those who don't know -- major label contracts require that the labels recoup all album-related costs before the artists get paid a single dollar in royalties; in 9 out of 10 cases, this threshold is never achieved, and the artist gets paid nothing).

Three quarters of a mil in 2 days, despite having intentionally released the tracks for free. How did they do it? Through the sale of limited-edition, high-priced "deluxe" editions of the album, featuring non-digital media like paper (gasp!) and vinyl (oooh!).

This is a great example of how the death of an artwork's uniqueness -- first noted by Benjamin, but drastically accelerated in recent years by "configurable" technologies such as the Internet -- has paradoxically spurred an increase in the perceived authenticity -- and thus, market value -- of physical artifacts. Put in simpler terms, the idea of paying $300 for a newly-released vinyl album -- no matter how limited the run -- would have seemed ABSURD in the days before MP3.

Interestingly, although many people would explain the increased market value of the vinyl product psychologically, arguing that the physicality of the product is what differentiates it from its ethereal counterparts, my research has shown that artificial scarcity can be just as effective a means of preserving uniqueness value when there's no physical artifact at all. Consider this selection from an interview I conducted with mash-up DJs Adrian and the Mysterious D of Bootie and published in my dissertation:

DJ Adrian: If it’s harder to get ultimately – I mean, because there’s a limited amount, then there’s a more perceived value. And with mash-ups, because they’re illegal, you can’t go through your regular distribution channels. . .

Mysterious D: Yeah, some songs are up for one day. And maybe only, let’s say, ten people downloaded it. Probably more than that. But say a hundred or 200 or 500 out of a billion people. It becomes, then, that song becomes limited and a little bit of piece of artwork because you can’t get it again.

DJ Adrian: And maybe you assign more value to it because of that. You know, like for instance the ‘Dean Gray’ album . . . it got a cease and desist order. . . . So, you know, does the value of it go up because it was harder to get?

Mysterious D: Yeah.

DJ Adrian: Even though it’s free and it’s there’s a million copies of it. Yeah.